Olympia takes a gamble on Taiwan market

Olympia Industries Bhd (OIB) is claiming a stake in Taiwan’s gaming market via its partnership with Taiwan Lottery Co Ltd (TLCL) before the former wins its bid for Tanjong plc’s Pan Malaysian Pools Sdn Bhd.

Olympia announced to Bursa Malaysia yesterday its wholly owned Lotteries Corporation Sdn Bhd (LCSB) had signed a sale and marketing service agreement with TLCL to jointly cooperate in the sales of 3-digit and 4-digit games in Taiwan.

LCSB is involved in the organising and management of sales of numbers forecast, pools and public lotteries, including 4-digit game in Sabah.

In the announcement, Olympia said the agreement is for three years beginning Jan 11, 2011 to Dec 31, 2013 with a further five-year extension of TLCL’s lottery operational rights to be approved by the Taiwanese authorities.

TLCL is a subsidiary of Chinatrust Financial Holding Co Ltd appointed to operate the Public Welfare Lottery by Chinatrust Commercial Bank, one of the largest private banks in Taiwan.

“Under the agreement, LCSB will provide services relating to product design, business consulting, operations, sales, marketing and promotional activities to increase the overall sales of the digit games operated by TLCL in Taiwan.

“As a consideration, LCSB will be entitled to a service fee of 50% of the statutory rate of 4.14% of the total digit games sales generated by TLCL for the duration of the agreement,” said Olympia which first made the announcement on this cooperation with TLCL in May last year.

According to Olympia’s 2010 annual report, its gaming division contributed RM171.2 million or 67.9% to the group’s revenue of RM252 million. Olympia’s other activities, amongst others, include property development and stockbroking.

For the 1QFY11 ended Sept 30, Olympia incurred a net loss of RM1.16 million compared with a net profit of RM4.04 million. Revenue was at RM46.4 million versus RM50 million a year ago.

Last month, Olympia told the stock exchange that it was still pursuing its bid to acquire the numbers forecast operator Pan Malaysian Pools from Tanjong plc.

Olympia’s share price rallied last month from the low of 21 sen to a 26-month high of 33.5 sen on Dec 17. The counter closed at 30.5 sen yesterday.

On its stockbroking arm, the group received the Securities Commission’s (SC) nod to undertake stockbroking activities accorded to a 1+1 stockbroking firm upon certain conditions. This means that its stockbroking unit Jupiter Securities Sdn Bhd is allowed to open branches nationwide.

Olympia said Jupiter was required to allocate adequate budget to enhance its current front office system by investing in a new order management system within the three-year development plan period.

“SC would only formally recognise Jupiter Securities with the status of 1+1 stockbroking company upon the SC being satisfied of all conditions of, activities and/or commitments made under the alternative mechanism had been fully complied and completed,” it said. - by Sharon Tan, theedgemalaysia.com.